Kenley's Plan To Stick CIB Bailout Into State Budget

Sen. Luke Kenley is the Harvard-educated genius who crafted the taxpayer-financed plan a few years back to build Lucas Oil Stadium, give it to the CIB to operate and worry not about where the money would come from to run the joint. After his first bailout plan failed during the regular session, Kenley is back with another plan that is just as bad as his earlier plan and this one will be stuck into the state budget so that lawmakers will have one up or down vote on the entire state budget, providing them an excuse for voting for something they don't want to admit to voters they supported. WTHR's Kevin Rader has an abbreviated look at Kenley's CIB bailout plan:

After all that, Senator Luke Kenley (R-Noblesville) got down to work on the budget in committee starting with the Capital Improvement Board. Kenley proposes funding the CIB with an auto rental tax increase, hotel/motel tax, ticket tax and $8 million generated from an expanded-base professional sports taxing area.

"There was concern among hotels in the downtown area that if you capture it all from the one hotel, then the convention folks would try to send everybody to the Marriott only, so we enlarged the area, but retained the $8 million cap," he said.

Kenley decided against consolidating the CIB, but does give the governor, speaker and president pro tem appointments to the board and asks the mayor to reappoint board members.

It really sickens me how much deference the media here in Indiana gives to Kenley on this issue. We have completely discredited him at every turn throughout this debate, but the media continues to treat him as if he is the only adult in the room knowledgeable on this subject and able to fix the CIB mess. As to his explanation for expanding the PSDA to include other hotels, in addition to the Marriott Hotel, to disabuse the other hotels that the Marriott will be favored over other hotels when it comes to convention business, it is disingenuous. The decision to play favorites was made long ago. Remember, I reported on how the new convention center won't have a ballroom, unlike the current convention center. And how I told you that one of the reasons the City backed the Marriott Hotel plan over other proposals was the sizable ballroom it agreed to include in its design plan. The other hotels can whine all they want, but the fact is the new Marriott Hotel will have first dibs on everything. Get used to it.

To my Republican friends, the Kenley bailout plan is what it is: a tax and spend boondoggle for one of the most inefficiently and corrupt governmental entities in the state of Indiana. It rewards misconduct and fiscal irresponsibility at a time when state lawmakers are squeezing every last dollar to avoid even deeper cuts in basic government operations. The Kenley bailout plan provides a $15 million a year government subsidy for the billionaire Simons, who haven't been required to provide a scintilla of proof to the public that their Pacers' NBA franchise deserves more of our tax dollars. It does nothing to reform the CIB despite all of the talk from Kenley and other Republican leaders about enacting the Kernan-Shepard recommendations to streamline and consolidate local governments. Nonetheless, Kenley and his State House buddies will pat themselves on the back for coming up with a plan to stiff average taxpayers to pay to run sports palaces most of them can no longer afford to attend because of exorbitant ticket prices. As for Kenley and his buddies, they'll continue to get their free tickets to all of the sporting events and all of the free drink and food they want while they're being wined and dined in the corporate suites at the sports palaces. And then they wonder why people are so cynical about their elected officials.

As an aside, Jim Shallow and his Indiana Week In Review friends discussed the CIB plan tonight on WFYI. Naturally, "Republican" Mike McDaniel led the charge in favor of Kenley's bailout plan and what a great solution it is. Of course, there was no disclosure that McDaniel is being paid with our taxpayer dollars to lobby for the CIB. So much for public television.

Lauth Principals Sued For Fraud

Wells Fargo Bank has filed a lawsuit in the U.S. district court in Indianapolis against the principals of Lauth Group, Inc., charging them with felony fraud for allegedly transferring certain personal assets pledged as collateral to other family members and entities controlled by those family members. The IBJ's Cory Schouten writes:

The San Francisco-based bank alleges in a suit filed June 17 in U.S. District Court that partners Robert Lauth Jr., Gregory Gurnik, Lawrence Palmer, Michael Curless and other company officials committed felony fraud as they tried to protect their own wealth from failing development projects they had personally guaranteed.

The principals in the locally based developer had promised personal assets as collateral for five loans from Wells Fargo, but the suit alleges they secretly transferred most of those assets in 2008 as they began defaulting on the loans, which had been scheduled to mature starting in October 2008.

The Lauth principals tried to get Wells Fargo to replace the personal guarantees with a guaranty of an affiliate company, but the bank refused. The bank began looking into the principals’ transfers after financial statements, submitted in May, showed substantially fewer assets remaining to serve as collateral for the loans.

Wells Fargo alleges that Robert Lauth, the company’s CEO, transferred ownership of his Carmel home and two properties in Naples, Fla., to his wife, Robin, less than a week before he submitted his financial statement. He also transferred assets to Robert Lauth Family Foundation Inc. and an unidentified trust that has his wife as a beneficiary.

Fellow partners Gurnik, Palmer and Curless also transferred assets to their wives, without receiving anything of value for the transfer, the suit says.

“The principals making each transfer did so with the actual intent to hinder, to delay or to defraud Wells Fargo in obtaining payment,” according to the suit.

A spokeswoman for the Lauth principals, Myra Borshoff Cook, denied the charges.

Schouten's story says another creditor, Inland American Real Estate Trust, has also accused the company's officials of shifting assets in order to leave creditors holding the bag. Inland has also accused Lauth principals of paying millions to corporate insiders on the eve of filing for bankruptcy protection. Shades of Conseco's Stephen Hilbert?

Jeffersonville Council Lawyer Found In Trash Can

Wow, this isn't the story a lawyer wants to read about himself in the paper. After a night of celebrating, Jeffersonville City Council lawyer Larry Wilder wound up passed out in his neighbor's trash can. A special meeting of the council has been called to discuss Wilder's future as the council's lawyer. Wilder, apologizing for his behavior, explained to the Courier-Journal how he wound up in the garbage can:

In an interview Thursday, Wilder acknowledged he went out Tuesday night with a group of friends to celebrate after one of them passed a real-estate licensing exam, and that he had been drinking. After dinner in Louisville, he said, the group went to Fourth Street Live.

"I was not driving," Wilder said. "It's a private matter, made public because I am a public person."

Wilder said he was driven home in a client's limousine. He declined to identify the client. He also said he remembered little of what happened after leaving Louisville.
Embry said he heard and then saw a group of people who were noisy in the street in front of his house about 5 a.m. Wednesday.

He said he called to them to ask if they needed help, and then saw a limousine drive away. He said he didn't find Wilder until two hours later.

According to the police report, four officers responded to the call received just before 7 a.m. and found the contents of the trash can scattered with Wilder inside.

A photo taken at the scene shows a man head-first in the can.Deeringer said the photo apparently was taken by one of the officers with the officer's personal cell phone, and that he is attempting to find out which one. While that doesn't violate department policy because it was taken in a public location, the chief said, he would prefer his officers not take private pictures of police activities, and plans to discuss the matter with the officer.

No public intoxication charge?

The story notes that Jeffersonville paid Wilder more than $107,000 last year for his contract work for the city council. Lousiville's WAVE has more on the story and the photos taken of Wilder by a police officer here.

Hancock County Auditor Hauled Away On Bribery Charges

The evidence of deep-seated corruption at all levels of government in the Hoosier state just keeps piling up. Today, Indiana State Police charged Hancock County Auditor Linda Grass accepted a $54,000 bribe from a relative in consideration for a contract she awarded to his construction firm to make repairs at the county courthouse. Grass is charged with felony counts of bribery, corrupt business influence, theft, conflict of interest and obstruction of justice according to the Indianapolis Star.

Indiana Inequality Takes A Stand And Falls Down

Indiana Equality, long cloaked in secrecy and backroom shenanigans, has enraged the very community it supposedly represents by publicly opposing the federal Employment Non-Discrimination Act ("ENDA"), legislation that would prohibit discrimination in the workplace based on a person's sexual orientation or gender identity. It seems the civil rights group thinks any move in the direction of equality is unjust unless all issues of perceived inequality are addressed. Bilerico's Bil Browning quotes from a statement released recently by the organization's leader, Jon Keep:

There is a window of opportunity now that may not come for another generation. If we push for less than full inclusion, it may be more difficult to motivate public support for full civil right protections. We should not ask for less than we need.

Anything less than full inclusion is unacceptable. Accordingly, the Employment Non-Discrimination Act (END) [sic] as currently proposed, cannot be accepted, supported or promoted by Indiana Equality....

Clearly, ENDA doesn't make us equal - rather, it creates a new form of segregation. It does not provide protections in housing and public accommodations. There are no protections for LGBT children in the public schools where administrators continue to turn a blind eye to harassment and brutality. With ENDA, we are only marginally protected in the workplace.

It's funny that Indiana Equality would be concerned about segregation when that's what it practices daily in the operation of its organization. The tightly-knit group refuses to open up its membership and allow open and free elections of its board and leadership. The primary goal of the self-appointed board and leaders of IE is to ensure the perpetuity of their control of the organization. You would think an organization that advocates equality would itself embrace equal treatment among the people it purports to represent. Another GLBT organization, Indy Pride, Inc., used to operate in a similar fashion. Its membership was limited to about seven people, all of whom were on the board and exercised complete control over the organization and the expenditure of its funds. The ACLU actually contemplated filing a lawsuit against the organization before it finally agreed to open up its membership. The group flourished thereafter. Imagine that.

Supreme Court Confirms Bennett's Election As Terre Haute Mayor

It's hard to believe that this issue is only being definitively decided nineteen months after the Terre Haute mayoral election concluded. The Indiana Supreme Court unanimously decided today that former Mayor Kevin Burke's challenge to Duke Bennett's eligibility to take office as the winner of the 2007 mayoral election due to Bennett's candidacy violating the Little Hatch Act is moot. Quite simply, the Court said, Bennett no longer violated the Little Hatch Act at the time he took office as Terre Haute mayor because he resigned his job with the Hamilton Center that was partially funded with federal tax dollars upon taking office.

The Supreme Court noted that the state statute under which Burke asserted his action allowed the disqualification of a candidate pre-election as a candidate for office, or post-election to prevent a winning candidate from assuming office. Post-election challenges based on the Little Hatch Act are not possible according to the Court. Although Burke first raised the Little Hatch Act violation early in the 2007 election campaign, he did not challenge Bennett's qualification until Bennett had been certified as the winner of the election. The Supreme Court said that Bennett's ineligibility had to be assessed at the time he was taking office since it involved a post-election challenge. Because Bennett ended his employment with the Hamilton Center, he was no longer subject to the Little Hatch Act. The post-election challenge, according to the Supreme Court, cannot consider whether the successful candidate was subject to the Little Hatch Act or had been in violation of the Act when he became a candidate.

Secondly, the Court enunciated the rule further to effectively foreclose post-election challenges based on Little Hatch Act violations. After the election, the winner is no longer "becoming" or "remaining" a candidate. If the challenged winner is no longer a candidate for public office, the disqualification doesn't come into play. The Court said this ruling is consistent with its "longstanding respect for the right of the people to free and equal elections." The Court noted its past decisions refusing to remove an elected officer on claims of ineligibility unless the electorate had notice or knowledge of the ineligibility or disqualification.

As I've pointed out in the past, there are a number of Indianapolis' current elected City-County Councilors who became candidates for that office in violation of the Little Hatch Act. Rest assured that timely-filed challenges to their eligibility under the Little Hatch Act will be made in the 2011 municipal election should they decide to continue to flaunt this law. Today's ruling instructs us that we cannot remove them now, but we can certainly block them from running for re-election to their offices.

CIB Bailout Hearing Turns Into Orgy

It's not as if anyone who has followed the Indiana General Assembly would be surprised by the show House Ways & Means Committee Chairman William Crawford (D-Indianapolis) put on this afternoon at a hearing to consider a bailout of the Capital Improvement Board. After hearing pathetic and uninformative presentations from City Controller David Reynolds and some CPA the CIB hired at London Witte totally lacking in substance and believable data, Democrats piled on local economic development initiatives at the urging of Chairman Crawford to the bill to achieve statewide fairness, at least for the State House porkers, if not the taxpayers. In the end, Crawford wound up holding the bill as leverage as the special session continues into its second week after Republicans refused to support the bill as proposed.

Rep. Scott Pelath had an amendment to allow for the expansion of professional sports development areas in other cities like Ft. Wayne, Evansville and Gary, allowing those local governments to capture more state revenues to pay for local pork barrel projects. Rep. Dennis Avery added three hotels and a new Evansville arena to Evansville's PSDA and an economic development initiative for Warrick County. Chairman Crawford added a measure to require Indianapolis hotels located within Indianapolis' PSDA to make public the salaries and benefits they pay to their employees. The public has a right to know this information he insists because the hotels are being subsidized by the public. Oddly, Crawford doesn't think the public should have a right to see the Pacers' and the Colts' audited financial statements despite the supposed need of the privately-owned sports franchises to receive tens of millions in public subsidies annually in order to operate. At this point, I would settle for finding out who all is on the CIB's payroll and the detailed information on their salaries and benefits.

Rep. Cherrish Pryor (D-Indianapolis) undid Gov. Mitch Daniels' plan to combine the CIB into the Facilities Management Board. She amended the CIB bailout bill to reduce the Board's size from 9 to 7, cutting the mayors appointments to just three, increasing the county commissioners' appointments to 3 and leaving one appointment to the City-County Council. She says her plan will make the CIB more accountable, but it looks to me that her division of board appointments allows any one elected official to escape responsibility for anything the CIB does. Pryor also wants to increase the food and beverage tax you pay when you attend an event at one of the CIB facilities. Under her plan, the tax at these facilities will be 14% instead of the 9% tax you currently pay. The additional $1.5 million will be offset by an equal reduction in the amount the City gets from the expanded PSDA, providing for a $6.5 million annual subsidy from the state instead of $8 million. Pryor had one good idea. Her amendment will require tax abatements in Marion County to be approved by the City-County Council after the MDC gives its approval.

Rep. Ed DeLaney offered a fail-safe amendment, assuming the new taxes the City-County Council would have to approve to bail out the CIB are not approved. He wants to give the governor authority to make $15 million grants in each of the next two years to the CIB, which will be funded from either the state's reserves or from township reserves for townships in Marion County and the donut counties. Pryor, who didn't even understand what her own amendment did until the staff explained it to her, thought she knew better than DeLaney and opposed it because it might dip into the Center Township Trustee's slush fund. DeLaney's amendment died for lack of support among Democratic members of the committee.

Members of the Ways & Means Committee pressed a CPA hired by the CIB, Bob Swintz, to be specific on the bottom line sum the CIB will need to be able to stay in business. His best guess is $20-$25 million, or about half what the CIB has insisted for months it needed. Interestingly, the CPA suggested the expanded convention center poses no real cash flow challenges to the CIB. His biggest concern is a $27 million credit facility reserve that comes to a head in August, at which time the CIB will either have to pay creditors $27 million or find that much money to replenish its reserve fund. Despite Crawford's efforts to get Swintz to say there is a date on which the CIB will no longer be able to operate because of cash flow concerns, Swintz didn't take the bait. In fact, he indicated that the CIB had set no date, for example, for sending out letters to convention organizers or the NFL indicating that the CIB may not be able to host their events. Swintz told the committee that he had not had time to review the cost savings analysis prepared for the governor's office and didn't expect to have his review completed until next week.

The absurdity of today's discussion is the acceptance by both Republican and Democratic legislators alike that the State has an obligation to step in and help the Pacers. Why? Lost in the discussion was the earlier legislative condition that the Pacers and Colts would have to contribute $10 million to the bailout plan. Here we are facing the worst economic downtown since the Great Depression and these guys are concerned about giving a $15 million a year public subsidy to the billionaire Simons. Controller David Reynolds tried to convince the committee that the Pacers weren't actually asking for the money, but Rep. Jeff Espich (R) quickly disabused the committee of that notion. He said he met with the Pacers and they were asking for the money.

Ah, someone else in the media noticed. WTHR's Mary Milz reports on the missing contributions from the Colts and Pacers:

Contributions from the city's pro sports teams is no longer part of the CIB bailout plan.

Initial plans for the bailout called for the Colts and Pacers to pay $5 million each to the Capital Improvement Board.

"Well, I think everyone felt strongly that was happening and it's no longer happening. What can I say?" said CIB President Bob Grand.

"I have no idea. I'm not privy to those discussions," said City-County Council member Joanne Sanders.

The Pacers, though, are losing money and the Colts have repeatedly said they already contribute through their 30-year lease.

"I think it's still looming out there," said State Senator Luke Kenley (R-Noblesville), who first suggested the contributions. "I don't know the right share of the teams and they've resisted in some ways, but I thought it was an important issue for the public to get an answer on."

Kenley says regardless of what happens at the statehouse, there's still a chance for the teams to contribute. But he also says that's an issue for Marion County to tackle.

"We continue to have conversations and remain optimistic about some level of participation," said Paul Okeson, Mayor Greg Ballard's Chief of Staff.

Still, Okeson says so far there's nothing on the table. The Colts, though, recently agreed to sponsor the high school football championships, with quarterback Peyton Manning becoming a spokesman for the Convention and Visitors Association.

"Anything like that is good," Kenley said.

This is just further confirmation of how little lawmakers care about the average taxpayer. They're all so enamored by the Colts and Pacers because of all of the free tickets and campaign contributions they get from the team's owners. They'll shove it up your ass without blinking an eye and then pretend they're doing you a favor. Throw all of the bums out, I say.

Obama Administration Attorney Called Mourdock's Attorney In Chrysler Bankruptcy A Terrorist

Remember a few years back when Gov. Mitch Daniels caught all kinds of flack from the Democrats for comparing House Speaker Pat Bauer's actions to those of a roadside bomber? Well, a member of the Obama administration's auto task force referred to Thomas Lauria, the attorney who represented Indiana State Treasurer Richard Mourdock's challenge of the Chrysler bankruptcy as a terrorist. The Wall Street Journal blog quotes attorney Matthew Feldman:

“President doesn’t negotiate second rounds…We’ve protected your management and board. And now you’re telling me to bend over to a terrorist like Lauria? That’s BS,” Feldman wrote.

Feldman dismissed any hopes of reaching an 11th-hour agreement that could have avoided bankruptcy for the Detroit auto maker. It’s over…I am not talking to you,” Feldman wrote to Manzo, an executive director with Capstone Advisory Group LLC.

A group of dissident lenders, holding a portion of Chrysler’s $6.9 billion in secured debt, rebuffed the Treasury’s final offer for secured lenders to exchange what they were owed for $2.25 billion in cash. President Barack Obama blamed those holdouts for pushing Chrysler into bankruptcy.

The lenders, owed about $300 million, attempted in bankruptcy court to block the sale of Chrysler’s assets to an entity-tied with Fiat SpA, but backed down shortly after U.S. Bankruptcy Judge Arthur Gonzalez ordered the lenders, known as the Chrysler non-TARP lenders, to reveal their identities.

Lauria’s law firm, however, resurfaced later in Chrysler’s Chapter 11 case to represent another holdout group of lenders: Indiana pension funds that had invested in the auto maker’s senior loans. The state pension funds have said Chrysler’s bankruptcy-restructuring plans are unconstitutional.

Electronic Monitoring Contractor's Employee Charged With Raping Client

Marion County awarded a one-year contract to Sentinel Offender Services to provide electronic monitoring and equipment for the county's community corrections program beginning in February. Marion Co. Prosecutor Carl Brizzi announced today that one of the contractor's employees has been charged with raping one of the home detention clients with whom he was charged with monitoring. The Star's Jon Murray writes:

Brima Kemokai, 26, is being held in Marion County Jail on $1 million bond on charges of rape, criminal confinement and two counts of official misconduct.

Prosecutors say he raped a woman who had come to a Community Corrections office June 6 to have faulty GPS monitoring equipment repaired. A security guard was the only other employee on duty that Saturday night while the two were in a dark office, according to a probable cause affidavit.

Kemokai worked for three or four months as an equipment technician for Sentinel Offender Services, which started a one-year contract in February to provide electronic monitoring and equipment for Community Corrections.

“This case illustrates the need for the phrase, ‘Who’s guarding the guards?’” Brizzi said during a news conference this afternoon with Community Corrections Director Tom Marendt. “I believe there is at least one other victim, if not more.”

Investigators are seeking the identity of the client Kemokai claimed to have had sex with, Brizzi said, and will look for other possible victims.

Murray's report says Kemokai is a citizen of Sierra Leone, a predominantly Muslim country on Africa's west coast. Murray quotes Brizzi as saying Kemokai is a permanent resident of the U.S. Community corrections director Tom Marendt says Kemokai passed Sentinel's background checks when he was hired, although Murray's report doesn't describe the extent of the background check performed. Sentinel's website says the company provides "world-class service and the highest level of offender electronic monitoring service." Tippecanoe County is identified as another customer of Sentinel. The company's website indicates Sentinel employs 325 staff in 40 field offices throughout the U.S. "A significant portion of our staff has extensive experience providing electronic monitoring and case management services," Sentinel's website claims. Kemokai had only worked for the company for three months according to Murray's story.

WIBC's report includes this comment from Brizzi concerning Sentinel's employment of an immigrant worker: "He'd also like to know why Sentinel is hiring people from other countries when there are so many Americans out of work these days." Brizzi mentions in the WIBC report that Sentinel's background check wouldn't have included criminal wrongdoing by Kemokai in Sierra Leone; however, if Kemokai is a permanent resident, he would have been subjected to a background check by USCIS, which should detect any serious criminal wrongdoing by a petitioning immigrant in his or her native country if the system is working properly. If Kemokai is convicted of these charges, he could be stripped of his permanent resident status and removed from the country upon completing his prison sentence.

A Fox59 News report claims Kemokai worked for three years as a corrections officer at the community corrections facility on Washington Street prior to going to work for Sentinel.